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Take Your Own Advice: Why All Financial Advisors Should Have a Succession Plan

Posted by Vanderbilt Financial Group on 7/11/17 2:17 PM

Succession planning is just as important for an Independent Financial Advisor as retirement planning is for any client. But many Financial Advisors nearing retirement have no plan in place. Here are a few reasons why it’s so important for Financial Advisors to take their own advice and make a plan.


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1. Send a Message

Having a Succession Plan in place sends a message to your clients that you are responsible. Presenting this plan to them will be a great conversation starter as you can explain that this plan was created for their best interest, God forbid anything should happen to you, they won’t be left hanging. When they realize the level of care and foresight you put into your business, they will feel more comfortable trusting you with their money.


2. It's Just Good Business

If you’re like many Financial Advisors, you built your practice on your own, from scratch. Make all your hard work worth it by respecting it with a formal plan. Just as you would advise a client who is a business owner, creating a well thought out succession plan is just good, smart business.

Also, having a succession plan can be an opportunity for profit. In many cases, a Financial Advisor can structure a deal to sell their book to a successor. For an advisor entering retirement, a deal like this can be a huge win as it sets their clients up with a comfortable transition and gives them a bonus to sail away with.


3. Anything Can Happen

Unfortunately, anything can happen. Injury, illness, or extenuating circumstances occur out of the blue. Having a set plan in place can be a huge relief when crisis strikes.

At Vanderbilt, we had an Advisor who required a serious surgical procedure that resulted in extensive recovery time. In the weeks prior to his surgery, we worked to find another Financial Advisor to oversee his practice in the case anything should happen. While neither advisor was close to retirement, the pair of advisors worked together so wonderfully that they signed a formal succession plan form for any future circumstances.

Also, in the case of sudden death, a succession plan can include a plan for payments to be made to your spouse or family for a period of time. Without a succession plan, your broker dealer cannot pay your beneficiaries.


VFG Makes Succession Planning Easy 

If you’re an Independent Financial Advisor, most likely your business was one that was built and branded around you. Finding a replacement to fill your shoes can be uncomfortable, but it doesn’t have to be. At VFG we understand that it can be painful and scary to decide to pass on your practice to someone else so we do a few things to make it easier on our advisors.

We have an in-house business succession planning committee that can help partner, facilitate and plan your business succession. Here are just a few ways we go about that process: 

  • Make A Match
    We help our advisors by finding a perfect match from the rest of our sales force by identifying someone who is a good cultural fit with shared values, goals, and strategies. This ensures an easy transition where the only difference your clients will experience is a new advisor.


  • Let's Make A Deal 
    We also offer support in structuring a deal and facilitating contract negotiations.


  • Yearly Check Up
    Each year at our annual sales and compliance meeting, our advisors are encouraged to fill out a formal Succession Plan Form so that we are in the loop with their plans and can help where needed.


If you're interested in learning more about our business succession planning committee, contact us!


Topics: Succession Planning

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